Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

VANUATU

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: December 11, 1982.
Exchange Arrangement
CurrencyThe currency of Vanuatu is the Vanuatu vatu.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe external value of the vatu is determined on the basis of an undisclosed transactions-weighted (trade and tourism receipts) basket of currencies of Vanuatu’s major trading partners. The Reserve Bank of Vanuatu (RBV) buys from and sells to commercial banks U.S. dollars only; however, it also deals in Australian dollars, euros, Japanese yen, New Zealand dollars, and pounds sterling with other customers. The RBV quotes rates daily for the vatu against the above currencies. Buying and selling rates of the vatu against the currencies in the basket are quoted once a day within margins ranging between 0.25% and 0.30% around the middle rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketCommercial banks provide forward exchange rate cover facilities.
Arrangements for Payments and Receipts
Prescription of currency requirementsn.r.
Payments arrangements
Regional arrangementsVanuatu participates in the following arrangements: the Melanesian Spearhead Group Trade Agreement, PACER, and PICTA.
Administration of controln.r.
International security restrictionsn.r.
Payments arrearsn.r.
Controls on trade in gold (coins and/or bullion)n.r.
Controls on exports and imports of banknotesn.r.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsn.r.
Imports and Import Payments
Foreign exchange budgetn.r.
Financing requirements for importsn.r.
Documentation requirements for release of foreign exchange for importsFor verification purposes, all appropriate documentation must accompany requests for foreign settlement by commercial banks.
Import licenses and other nontariff measuresThe importation of frozen chicken pieces, T-shirts bearing a Vanuatu motif, firearms and ammunition, animals and plants, and transistor and telephone equipment is restricted through import-licensing arrangements. A similar restriction is applied to the importation of rice, sugar, flour, canned fish, and tobacco products.
Positive listYes.
Negative listBans are in effect for health reasons on imports of animals and animal products from Europe and the United Kingdom, as well as on chicken and poultry products from Victoria and New South Wales, Australia.
Other nontariff measuresThe RBV has the authority to restrict imports to the equivalent of US$250,000 an individual.
Import taxes and/or tariffsThe import duty structure consists of eight rates, ranging from zero to 30%, and the 30% rate applies to most goods. Most basic items that were previously duty-free are subject to a 5% duty. Approved goods imported under the Melanesian Spearhead Group Trade Agreement and the PICTA and PACER trade agreements are duty-free. These goods require certificates of origin issued to exporters and importers by the member countries.
A 35% duty applies to certain imported products under the protected goods category, except for six items covered under the Melanesian Spearhead Group Trade Agreement, to which a 40% duty applies. Additionally, a 40% duty, which is to be decreased by 5% a year, is applied on ice cream, fruit juice, meat, and soap, and duties of VT 350 and VT 315 a liter are applied to fuel and paint, respectively.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsn.r.
Financing requirementsn.r.
Documentation requirementsn.r.
Export licensesThe exportation of logs and flitches is banned for environmental reasons. Under special circumstances, small parcels of logs may be exported if they cannot be processed by any company in Vanuatu. Any proposal to export logs requires approval of the Council of Ministers. Export permits—the issue of which is coordinated by the Forestry Department—are required for rare or endangered species. Effective January 1, 2004, the export of sandalwood logs is banned, and sandalwood must be processed locally prior to exportation. Previously, exports of logs were allowed with an export permit.
Without quotasFor conservation purposes, exports of certain products, such as trochus, green snails, bêches-de-mer, mother-of-pearl, aquarium fish, crustaceans, and coconut crabs, are subject to authorization. Exports of copra and cocoa are channeled through the Vanuatu Commodities Marketing Board. Exports of kava may be undertaken by individuals, subject to authorization from the Quarantine Office. Exports of artifacts having a special value, either as a result of ceremonial use or because they are more than 10 years old, are subject to authorization from the Cultural Center.
Export taxesThere are taxes on exports of logs; unworked shells; and wood in the rough, whether or not stripped of bark and sapwood, or roughly squared.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersn.r.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsn.r.
Restrictions on use of fundsn.r.
Capital Transactions
Controls on capital transactionsn.r.
Controls on capital and money market instrumentsn.r.
Controls on derivatives and other instrumentsn.r.
Controls on credit operationsn.r.
Controls on direct investmentn.r.
Controls on liquidation of direct investmentn.r.
Controls on real estate transactionsn.r.
Controls on personal capital transactionsn.r.
Provisions specific to commercial banks and other credit institutionsn.r.
Provisions specific to institutional investorsn.r.
Other controls imposed by securities lawsn.r.
Changes During 2004
Imports and import paymentsJanuary 1. The export of sandalwood logs was banned.

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